Hurricane season isn’t fun for anyone, but for property owners, it can bring extra stress. Every year from June 1 to Nov. 30, real estate investors and property managers in Gulf and Atlantic Coast states remain on high alert.
The time to prepare for a hurricane is before a storm develops, especially since last-minute prep can leave you stranded without supplies to protect your property or insurance to protect your finances. If you’re concerned one of your properties might be affected this or any other hurricane season, read on for quick-action tips that property managers need to know.
General Advice for All Property Managers
- Look over your property insurance policies. Ideally, you want policy limits generous enough to pay for rebuilding the property after the storm. You’ll also want to determine whether your hurricane deductible (which can be different than your other deductibles) is affordable. You may also want to make sure you have a policy with business income/income replacement coverage to replace lost rent if you can’t rent your property during or after a hurricane.
- Consider flood insurance coverage — even if you’re not in a flood zone. Whether you’re in a FEMA-identified flood zone or not, don’t wait until you see a storm churning in the ocean before getting a policy. It is estimated that approximately 25% of paid flood claims are for insured properties not in a high-risk flood zone. Another reason not to drag your feet is that many brand new flood insurance policies have a 30-day wait before going into effect.
- Get contents coverage and make an inventory of everything. If you have a furnished rental property or property with a furnished common space, make sure the property insurance policy includes contents coverage. Then, maintain a full inventory of the items along with pictures. Note that property owners are not generally responsible for tenant property damaged in a hurricane, unless they’ve neglected repairs that directly prompted the property damage, so there’s no need to include that in the contents coverage.
- Keep bill payment information and copies of property records offsite. You may still need to pay bills and access records about your property during and after the hurricane, so keep copies of data and billing information offsite so you can always access them.
- Prepare the property. The more you prepare your property ahead of time, the better it can weather a storm. This can include keeping your trees trimmed, investing in storm shutters, and keeping the roof maintained, with loose or damaged shingles quickly repaired. As an added bonus, many of the steps you take to prepare your property for hurricanes, such as trimming trees, can also cut down on general liability exposure.
What to Do If the Property Is Occupied
- Think about your tenants, not just your property. There’s no shame in prioritizing the protection of your rental property, but helping your tenants deal with hurricane risks is both humane and smart, even if you’re not legally required to do so. Make sure your tenants understand what flood zone level they are in, when they should consider evacuation, what a potential evacuation plan is, where local shelters are, and what supplies they should have in their hurricane disaster kit.
- Train on-premises employees well and know your responsibilities. Train employees to know what steps they should take to prepare the rental property and residents for a hurricane and when they should take these steps — such as after a watch or warning is declared. In addition, you may want to have different procedures for tropical depressions, tropical storms, and hurricanes. It’s also important to understand your state’s rules regarding pay, termination, and employee safety during a hurricane. The rules may vary depending on whether the employees sleep onsite or are required to be on duty during the storm.
- Understand your legal responsibilities to tenants. In some states and with some lease agreements, landlords may be required to protect occupied rental properties during a hurricane. In other states, like Florida, property managers are not generally required to protect property or tenants from a hurricane.
- Find out how much time you have to make repairs. Property managers are generally required to maintain a habitable property for tenants. After a hurricane, they may have an extended period of time to make repairs before the tenant is permitted to contract for repairs themselves or terminate the lease. In some cases, such as when a hurricane’s damage results in the proliferation of mold, a property manager’s responsibility may extend far out from the date of the hurricane.
- Prepare for cleanup and repairs. It can be challenging to get service providers to clean up your property quickly after a hurricane since that’s when demand for their services usually skyrockets. Property managers should have contracts in place to get priority tree removal, debris pick-up, and other services after a storm.
What to Do If the Property Is Unoccupied or Vacant
- Get the right insurance coverage. Vacant homes used for vacation or other rentals may need different insurance coverage than apartment buildings. They need different insurance, too, than an unoccupied property, which is a rental dwelling that is empty but contains a tenant’s belongings (possibly because they are on an extended absence). Regardless of whether the dwelling is vacant or unoccupied, ValuePenguin estimates that you can expect to pay around 50% more than you would for your traditional homeowner’s policy.
- Secure the premises. If you have a furnished home or vacation rental, you’ll want to secure any outdoor furniture, plants, lawn decor, and other outdoor property.
- Do a walkthrough before renting it again. It may seem from the outside that there was no damage to the property, but it’s still important to walk through and ensure that it’s habitable before renting it out again.
Owning a rental property can be an efficient way of creating an income, but it doesn’t come without major responsibilities. If you own rental property in a Gulf or Atlantic Coast state, or a state that is prone to other repeated hazards like earthquakes or tornadoes, be sure you understand your legal responsibilities to tenants and employees and that you have the right insurance to protect your financial interests.
This article has been contributed by Callie McGill.